USD/JPY: The dollar bulls may be struggling for traction in their attempted recovery [Video]
|USD/JPY
The dollar bulls may be struggling for traction in their attempted recovery, but they are hanging in there. Friday’s positive candle could not be translated into the new week as the market formed an almost doji candle (denoting uncertainty) yesterday. The fact that this came once more around the resistance of the 106.00/106.60 overhead supply makes it even more uncertain. That is now five sessions since the rally from 104.17 where the market has tested above 106.00 but failed to generate a closing breach. We continue to favour another failure in the 106.00/106.00 band. Once more this morning we see the dollar bulls trying to get something going, with a tick above 106.00. There is a slight improvement coming through on momentum indicators now, with the bulls encouraged by the MACD lines crossing higher. However, the daily RSI and Stochastics are now into an area where previous rallies have failed. The bulls would need to realistically pull above 107.50 to suggest there is sustainable traction to a recovery. This still has the look of a market unwinding into resistance and building for the next lower high. The reaction to support at 105.30 will be key to this, as a break back below would see the recovery rolling over once more.
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